How to Lease My Personal Auto to My Business

By Jackie Lynn
My Personal Auto, My Business

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A personal automobile can be a legitimate business expense you can claim on the tax return for your business. And technically it can be leased to a small business if that small business is an entity and if you can act as a lessor in your state. A small business is considered an entity if it’s been incorporated, usually with the help of an attorney. Your small business will need a corporation name, registration with the state and separate income accounts in its name.

Incorporate your business. Hire an attorney familiar with the incorporation laws of your state. These laws vary among the states. Basically, though, you'll need a corporation name that usually includes some form of “incorporated” or “inc.” in the name to indicate that your business is incorporated. An incorporated business is a separate legal entity, making it possible for the corporation to sign contracts in its name, not in your name personally.

Review your state’s laws on leasing automobiles. Some states may require you to obtain a dealership license to lease a car to anyone. Such a license allows you to deal and lease cars to customers, including corporations. Consult a knowledgeable attorney to learn whether you need additional licenses and the amount of any fees.

Consult a business attorney to draw up a lease contract between you and your incorporated business. Be aware that you may not be able to act as both the lessor and the lessee by signing for both the lease and the incorporated business. The document should contain a lease price, lease term and responsibility for any damages and insurance premiums at the very least. Also, if your company is publicly traded, you must be able to let stockholders know how the auto will be useful to the corporation; otherwise, you could be liable to the corporation for making personally advantageous business decisions. This is why it's wise to engage an attorney.

About the Author

Jackie Lynn is an attorney by trade with a Juris Doctor and bachelor's degrees in law and business respectively. She specializes in bankruptcy and immigration law and is also is an avid fitness enthusiast and animal lover. She has been writing on her own hobby website since 2007.

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